Reputation and the Wall Street Walk
Koji Asano
MPRA Paper from University Library of Munich, Germany
Abstract:
This study examines whether the threat of exit by blockholders can alleviate managers' moral hazard problems when they have reputation concerns in stock markets. When future cash flows decline over time, the threat of exit and reputation concerns both discipline managers. However, when future cash flows rise over time, blockholders trade based on information about the managers' commitment ability rather than their past performance, thereby weakening reputational discipline.
Keywords: exit; reputation concerns; governance (search for similar items in EconPapers)
JEL-codes: G10 G30 G34 (search for similar items in EconPapers)
Date: 2023-08-01
New Economics Papers: this item is included in nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:118158
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